economic growth of the philippines essay

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The Philippines has recorded its strongest economic growth in more than 40 years, defying a global slowdown and rising inflation after lifting all pandemic restrictions at the end of last year.

The south-east Asian economy grew at an annual rate of 7.2 per cent in the fourth quarter of 2022, beating economist expectations of about 6.5 per cent growth, according to Philippine Statistics Authority data. Full-year gross domestic product increased by 7.6 per cent, its strongest growth since 1976.

The Philippines , which relies largely on remittances from overseas workers and business outsourcing activities such as call centres, alongside farming and fishing, suffered one of Asia’s sharpest contractions during the pandemic because of strict lockdowns.

The government on Thursday attributed much of the growth to the country’s reopening in the final three months of the year, with the services industry, consumer and government spending, exports and imports all posting strong rises.

Economic planning secretary Arsenio Balisacan forecasted a further boost to the economy this year from the end of zero-Covid in China , saying it would “surely be a boon”.

The upbeat outlook of the Philippines and many of its regional emerging market neighbours including Indonesia and Malaysia contrasts sharply with that of developed nations.

Philippine president Ferdinand Marcos Jr, who attended the World Economic Forum in Davos last week, predicted the economy would keep growing at near 7 per cent this year.

US and European central bankers speaking at the conference instead vowed to “stay the course” on interest rate increases to cool down their economies and tame high inflation.

John Williams, president of the Federal Reserve Bank of New York, said he expected growth to slow to a “modest” pace of roughly 1 per cent in 2023, while Christine Lagarde, head of the European Central Bank, projected growth of 0.5 per cent.

However, analysts cautioned the Philippines economy could be hit by inflation even as they revised up growth forecasts. “High inflation — the headline rate reached 8.1 per cent year on year in December — will drag on the purchasing power of consumers,” research company Capital Economics said in a note.

“Government spending is also likely to remain subdued. Despite the government’s ambitious infrastructure drive, total spending this year is set to increase by just 4.9 per cent in nominal terms,” said Gareth Leather, senior Asia economist at Capital Economics.

Even so, south-east Asia’s emerging market economies have been buoyed by the fading prospect of more aggressive interest rate rises by the US Federal Reserve, thanks to signs that consumer spending is starting to ebb, the labour market is cooling and price pressures have eased. Regional currencies have come under less pressure as net foreign outflows of bonds eased at the end of 2022, allowing governments to focus on supporting their economies.

The Association of Southeast Asian Nations, which includes Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, was among the fastest growing regions in the world last year. Economists expect the region’s economic growth to moderate this year but remain above 4 per cent — higher than the IMF’s latest global average forecast of 2.7 per cent.

Last week, central bankers in Indonesia and Malaysia also signalled they would focus on growth and indicated they expected inflation to moderate.

Bank Negara Malaysia unexpectedly held its interest rate, while Bank Indonesia raised its benchmark rate by only 25 basis points and suggested it could be nearing the end of its rate-rise cycle.

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Philippine economic development, looking backwards and forward: an interpretative essay.

Over the past decade, the Philippine development story has attracted international attention as it transformed from being the “Sick Man of Asia” to “Asia’s Rising Tiger”. However, the country’s strong growth momentum was abruptly interrupted by the COVID-19 pandemic, which continues to cast a huge shadow over its development outlook. With the country now at the crossroads, this paper reflects on and draws lessons for economic development and policy by examining the country’s three main economic episodes over the post-independence era: (a) the period of moderately strong growth from 1946 to the late 1970s, (b) the tumultuous crisis years from the late 1970s to the early 1990s, and (c) the period from the early 1990s to the 2019 when it rejoined the dynamic East Asian mainstream. Through comparative analysis, the paper also seeks to understand the country’s development dynamics and political economy. We conclude by highlighting elements of a recovery and reform agenda in the post-pandemic era.

Key Words: Philippines, economic development, economic history, political economy, institutions, COVID-19, ASEAN, comparative analysis

JEL codes: E02, I0, N15, O10, O43, O53, P52

Updated:   27 May 2024 / Responsible Officer:   Crawford Engagement / Page Contact:   CAP Web Team

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The Philippine economy under the pandemic: From Asian tiger to sick man again?

Subscribe to the center for asia policy studies bulletin, ronald u. mendoza ronald u. mendoza dean and professor, ateneo school of government - ateneo de manila university @profrum.

August 2, 2021

In 2019, the Philippines was one of the fastest growing economies in the world. It finally shed its “sick man of Asia” reputation obtained during the economic collapse towards the end of the Ferdinand Marcos regime in the mid-1980s. After decades of painstaking reform — not to mention paying back debts incurred under the dictatorship — the country’s economic renaissance took root in the decade prior to the pandemic. Posting over 6 percent average annual growth between 2010 and 2019 (computed from the Philippine Statistics Authority data on GDP growth rates at constant 2018 prices), the Philippines was touted as the next Asian tiger economy .

That was prior to COVID-19.

The rude awakening from the pandemic was that a services- and remittances-led growth model doesn’t do too well in a global disease outbreak. The Philippines’ economic growth faltered in 2020 — entering negative territory for the first time since 1999 — and the country experienced one of the deepest contractions in the Association of Southeast Asian Nations (ASEAN) that year (Figure 1).

Figure 1: GDP growth for selected ASEAN countries

And while the government forecasts a slight rebound in 2021, some analysts are concerned over an uncertain and weak recovery, due to the country’s protracted lockdown and inability to shift to a more efficient containment strategy. The Philippines has relied instead on draconian mobility restrictions across large sections of the country’s key cities and growth hubs every time a COVID-19 surge threatens to overwhelm the country’s health system.

What went wrong?

How does one of the fastest growing economies in Asia falter? It would be too simplistic to blame this all on the pandemic.

First, the Philippines’ economic model itself appears more vulnerable to disease outbreak. It is built around the mobility of people, yet tourism, services, and remittances-fed growth are all vulnerable to pandemic-induced lockdowns and consumer confidence decline. International travel plunged, tourism came to a grinding halt, and domestic lockdowns and mobility restrictions crippled the retail sector, restaurants, and hospitality industry. Fortunately, the country’s business process outsourcing (BPO) sector is demonstrating some resilience — yet its main markets have been hit heavily by the pandemic, forcing the sector to rapidly upskill and adjust to emerging opportunities under the new normal.

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Second, pandemic handling was also problematic. Lockdown is useful if it buys a country time to strengthen health systems and test-trace-treat systems. These are the building blocks of more efficient containment of the disease. However, if a country fails to strengthen these systems, then it squanders the time that lockdown affords it. This seems to be the case for the Philippines, which made global headlines for implementing one of the world’s longest lockdowns during the pandemic, yet failed to flatten its COVID-19 curve.

At the time of writing, the Philippines is again headed for another hard lockdown and it is still trying to graduate to a more efficient containment strategy amidst rising concerns over the delta variant which has spread across Southeast Asia . It seems stuck with on-again, off-again lockdowns, which are severely damaging to the economy, and will likely create negative expectations for future COVID-19 surges (Figure 2).

Figure 2 clarifies how the Philippine government resorted to stricter lockdowns to temper each surge in COVID-19 in the country so far.

Figure 2: Community quarantine regimes during the COVID-19 pandemic, Philippine National Capital Region (NCR ), March 2020 to June 2021

If the delta variant and other possible variants are near-term threats, then the lack of efficient containment can be expected to force the country back to draconian mobility restrictions as a last resort. Meanwhile, only two months of social transfers ( ayuda ) were provided by the central government during 16 months of lockdown by mid-2021. All this puts more pressure on an already weary population reeling from deep recession, job displacement, and long-term risks on human development . Low social transfers support in the midst of joblessness and rising hunger is also likely to weaken compliance with mobility restriction policies.

Third, the Philippines suffered from delays in its vaccination rollout which was initially hobbled by implementation and supply issues, and later affected by lingering vaccine hesitancy . These are all likely to delay recovery in the Philippines.

By now there are many clear lessons both from the Philippine experience and from emerging international best practices. In order to mount a more successful economic recovery, the Philippines must address the following key policy issues:

• Build a more efficient containment strategy particularly against the threat of possible new variants principally by strengthening the test-trace-treat system. Based on lessons from other countries, test-trace-treat systems usually also involve comprehensive mass-testing strategies to better inform both the public and private sectors on the true state of infections among the population. In addition, integrated mobility databases (not fragmented city-based ones) also capacitate more effective and timely tracing. This kind of detailed and timely data allows for government and the private sector to better coordinate on nuanced containment strategies that target areas and communities that need help due to outbreak risk. And unlike a generalized lockdown, this targeted and data-informed strategy could allow other parts of the economy to remain more open than otherwise.
• Strengthen the sufficiency and transparency of direct social protection in order to give immediate relief to poor and low-income households already severely impacted by the mishandling of the pandemic. This requires a rebalancing of the budget in favor of education, health, and social protection spending, in lieu of an over-emphasis on build-build-build infrastructure projects. This is also an opportunity to enhance the social protection system to create a safety net and concurrent database that covers not just the poor but also the vulnerable low- and lower-middle- income population. The chief concern here would be to introduce social protection innovations that prevent middle income Filipinos from sliding into poverty during a pandemic or other crisis.
• Ramp-up vaccination to cover at least 70 percent of the population as soon as possible, and enlist the further support of the private sector and civil society in order to keep improving vaccine rollout. An effective communications campaign needs to be launched to counteract vaccine hesitancy, building on trustworthy institutions (like academia, the Catholic Church, civil society and certain private sector partners) in order to better protect the population against the threat of delta or another variant affecting the Philippines. It will also help if parts of government could stop the politically-motivated fearmongering on vaccines, as had occurred with the dengue fever vaccine, Dengvaxia, which continues to sow doubts and fears among parts of the population .
• Create a build-back-better strategy anchored on universal and inclusive healthcare. Among other things, such a strategy should a) acknowledge the critically important role of the private sector and civil society in pandemic response and healthcare sector cooperation, and b) underpin pandemic response around lasting investments in institutions and technology that enhance contact tracing (e-platforms), testing (labs), and universal healthcare with lower out-of-pocket costs and higher inclusivity. The latter requires a more inclusive, well-funded, and better-governed health insurance system.

As much of ASEAN reels from the spread of the delta variant, it is critical that the Philippines takes these steps to help allay concerns over the country’s preparedness to handle new variants emerging, while also recalibrating expectations in favor of resuscitating its economy. Only then can the Philippines avoid becoming the sick man of Asia again, and return to the rapid and steady growth of the pre-pandemic decade.

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What does 2023 hold for the Philippines’ economy?

The COVID-19 pandemic and other geopolitical events have caused a global crisis over the past couple of years. Major upheavals of this scale are not unknown—in the 20th century, various significant events shook the world, like both World Wars and the Cold War. Between these periods of disruption, global events played out across three “eras”: the Post-War Boom after the Second World War, the Era of Contention from 1972 to 1974, and the Era of Markets from 1989 to 1992, each of which had distinct characteristics and opportunities.

The effects of the current crisis, both humanitarian and economic, cannot be underestimated. However, as the world continues to emerge from the pandemic, business leaders can take advantage of these upheavals, and shape innovation and growth—as evidenced in previous eras—by anticipating future disruptions and shaping strategies accordingly. This kind of “era thinking” is particularly valuable in the Philippines, where disruptions caused by the conflict in Ukraine and international supply-chain crises have had a clear impact.

Looking ahead into 2023, the economic forecast for the Philippines remains a moving target. After a record 10 percent contraction in 2020, the country may bounce back in 2023 with projected growth of around 5.3 percent, though it will hardly rise above preCOVID-19 levels (exhibit).

Key challenges face the country: significantly high unemployment numbers; a high inflation rate (forecast to reach 5.1 percent in 2023); rising policy rates; import and export bottlenecks; and the declining strength of the Philippine peso against the American dollar. 1 “2023 inflation seen topping official target,” Manila Times , January 13, 2023.

The state of the Philippines’ economy in seven major sectors

This article analyzes seven key sectors that offer a detailed insight into the state of the Philippines’ economy in 2023 and beyond. As the data shows, the outlook is complex—there are serious issues to address, but also reasons for optimism.

Real estate and construction

Several global and macroeconomic shocks will likely impact the Philippines’ post-pandemic economic recovery in the real estate and construction sectors. Policy rates may reach 6.25 percent in the first half of 2023, which would negatively impact home lending rates and increase the strain on a sector that must also address the increased costs of construction and logistics caused by supply-chain issues.

Nonetheless, more optimistic projections include an expansion in real estate investment opportunities and the emergence of green real estate, a promising step toward the Philippines’ goal to reduce carbon emissions by 75 percent by 2030. 1 “Philippines raises carbon emissions target to 75 percent by 2030,” Reuters, April 16, 2021.

Much of the sector is expected to recover to pre-pandemic levels by the end of 2023, and construction by the end of 2024. Much of this growth will likely be driven by residential building construction, predicted to grow by 12 percent. Non-residential construction, by contrast, has yet to recover to pre-pandemic levels.

There will likely be an increased demand for office space, caused by companies introducing return-to-office policies, as well as a resurgence in the need for industrial, retail, and leisure spaces, both of which would boost sector-wide growth.

Another consideration is hybrid working—this is in fact higher in the Philippines than the global norm. 1 Vaughn Alviar, “Hybrid work is the future,” Philippines Daily Inquirer , March 11, 2022. Office spaces may need to be reinvented as companies look to adopt more hybrid ways of working. This could result in vacancy rates persisting, however the growth of coworking facilities and the desire for sustainable buildings will necessitate innovations in construction techniques and leasing agreements, thus encouraging sector-wide growth.

Travel and hospitality

The outlook for the travel and hospitality sector is strong, with a full recovery to pre-pandemic levels expected by 2024. Outbound and inbound travel may be sluggish due to remaining international travel restrictions and further health and safety concerns: 71 percent of Asian countries still impose travel restrictions to varying degrees; Europe is more lenient with 50 percent of countries imposing no restrictions at all.

Despite this, hotel occupancy is expected to rise as more foreign tourists visit the Philippines. China’s removal of quarantine on arrival from January 8, 2023, and Hong Kong’s withdrawal of mandatory quarantine on arrival in September 2022, are both reasons for optimism. If mainland China’s air travel were to recover at the same pace as Hong Kong’s, four million air passengers a month out of China can be expected by the second quarter of 2023, pushing air travel back up to 40 percent of pre-COVID-19 levels.

Several key trends are expected to influence economic recovery in the sector, the impacts of which may be both positive and negative. High inflation, for example, has increased airlines’ operating expenses. The weakening peso, by contrast, could have a positive effect by encouraging locals to travel and spend within the country rather than abroad. In fact, local air travel is already on the rise and is expected to reach preCOVID-19 levels in the second half of 2023. 1 Katlene O. Cacho, “Air travel approaches pre-pandemic levels,” SunStar, December 20, 2022

The growth of “revenge travel” (travelling widely and often to make up for time and opportunities lost during the COVID-19 pandemic and attendant travel restrictions) also contributes to the robust growth of leisure travel, while business travel is recovering more slowly. This is largely due to the inconsistent travel restrictions between countries, and remote working tools that do away with the necessity of meeting in person.

Sustainable tourism and increased awareness of eco-friendly travel options may not negatively affect the number of tourists visiting the Philippines, but they will likely change how visitors and locals arrive in, and travel through, the country. The fact that the hospitality industry has recovered more significantly than airlines shows this. Other contributing factors include the increase in domestic travel and the popularity of the “digital-nomad” lifestyle, which allows travelers to live and work for extended periods in their destinations of choice, rather than flying between destinations frequently.

Financial services

The strength of the Philippines’ financial services sector in 2023 will likely be subject to two key factors: interest rate hikes and rising inflation. Interest rate hikes could have a positive effect by widening the net-interest margin, but macrovolatility could cause a slowdown in new loans. Rising inflation will likely increase the pressure on wages and increase operational costs.

The financial sector is already responding to these challenges. It is prioritizing the interoperability and digitization in top banks, and the country’s central bank, Bangko Sentral ng Philipinas, is expected to increase interest rate hikes to keep up with inflation. 1 Lawrence Agcaoili, “More BSP rate hikes boom as inflation spikes,” Philstar Global, January 6, 2023.

Banks have taken additional steps. These include recovering nonperforming loans, reducing loan loss provisions with an outlook on improved credit status, and the emergence of digital neobanks, which offer higher savings interest rates and faster customer acquisition. Perhaps most crucially, there are growing efforts to make banking more accessible and inclusive. The growth of digital banking is significant: in 2021, 60 percent of Filipinos used digital banking (a sharp increase from 17 percent in 2019), and growth is expected to accelerate in 2023. 2 “2021 financial inclusion survey,” Bangko Sentral ng Pilipinas, 2021.

Growth in the Philippines’ energy sector contracted to 4.8 percent in 2022 and is expected to rebound to 5.5 percent in 2023. However, the sector needs to ensure that this growth target can be met given looming supply constraints and while accelerating the transition to green energy.

Due to a growing population, an economy coupled with the depletion of domestic gas from the Malampaya gas field, and a heavy reliance on imported fuel, a power supply shortage is expected closer to 2024 to 2025. 1 “Malampaya depletion expected by 1st quarter of 2027,” BusinessWorld, May 19, 2021. This will put sustained upward pressure on prices and an urgency to bring greenfield capacity online.

On the energy transition, major players are addressing the challenge by diversifying energy assets across the board, with investments in cleaner technologies such as solar, hydro, and battery energy storage systems. These efforts are underway in both the private and public sectors. For example, the Philippine government has introduced measures to improve the availability and sustainability of energy. Legislation has been passed to reduce fuel and power costs via subsidies for transport operators, boost investments in indigenous energy resources such as coal, and strengthen electric cooperatives for broader access to electrification. 2 Philippine energy plan 2020–2040, Department of Energy, Republic of the Philippines.

The Philippines may generate enough energy to cover its consumption needs, but the supply-demand balance will remain tight, with clear downside risks. Threats to the energy supply include rising oil and gas prices, supply-chain disruptions, and currency depreciation.

The healthcare sector experienced strong growth during the COVID-19 pandemic: in 2021, healthcare services increased by 14.1 percent and pharmaceutical manufacturing by 12.9 percent. Growth stalled in 2022 (3.9 percent and 8.25 percent for healthcare services and pharmaceuticals respectively), and this trend is expected to continue in 2023. While demand will continue to grow, the sector will have to address three major challenges.

First, rising inflation will impact costs for service providers and manufacturers, though prices will initially lag due to procurement contracts being set in advance. One of the biggest drivers of inflation is an increase in healthcare wages, especially of hospital staff such as nurses, who are in short supply locally and globally. Second, supply-chain disruptions will drive up medicine price variations and production inefficiencies, particularly as the Philippines is a net importer of pharmaceuticals. And third, turnover levels for health workers are expected to remain high, straining the capacity of service providers and potentially resulting in a poor quality of healthcare.

To address these challenges, the sector is renewing the emphasis on universal healthcare and building robust healthcare ecosystems. The Department of Health aims to close the supply-demand gap in healthcare by increasing facilities in areas outside Metro Manila and making medicines more affordable. 1 “Universal health care,” Department of Health, Republic of the Philippines.

In the private sector, key players are investing strategically to cover the healthcare value chain, and making concerted efforts to tap into growing online markets through electronic medical records, all-in-one telemedicine and consultation apps, and other ancillary services.

The Philippines’ healthcare sector is so vast that broad, sector-wide forecasts can sometimes obscure as much as they reveal. The outlook becomes clearer when subsectors are evaluated on their own terms, as they diverge widely in market size, are subject to different trends, and experience different rates of growth. The healthcare providers subsector, for example, boasts a larger market size than the products and payors subsectors combined.

Despite significant growth in 2022, the Philippines still has some catching up to do. There is no doubt that it faces global macroeconomic headwinds in 2023, however big pockets of opportunity exist within each of its biggest sectors. To grasp these as soon as possible, companies need to rethink how they deliver to customers and operate their businesses. With such strategies in place for possible future disruptions, the Philippines can stand strong and continue to grow its economy in the year ahead.

Jon Canto is a partner in the Manila office, where Kristine Romano is a partner and Danice Parel and Vicah Villanueva are consultants.

The authors wish to thank Aaron Ong, Ryan Delos Reyes, and Jeongmin Seong for their contributions to this article.

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Philippines Economic Update: Investing in the Future

STORY HIGHLIGHTS

• In 2017, the Philippines was among the top three growth performers in the region.
• The medium-term growth outlook for the Philippines remains positive but domestic risks are more prominent.
• Higher real wages are essential to achieve shared prosperity and inclusive growth.

ECONOMIC AND POLICY DEVELOPMENTS

In 2017, the Philippines was among the top three growth performers in the region. Only Vietnam and China did better. The Philippine economy grew from 6.9 percent year-on-year in 2016 to 6.7 percent year-on-year in 2017. Growth was anchored in strong exports, while investment growth significantly slowed and consumption growth moderated. The Philippines’ annual exports rose sharply in 2017 and became the main engine of economic growth, while imports continued to grow by double-digits. Investment growth slowed in 2017, following two consecutive years of rapid expansion, and climbing inflation slowed real wage growth and contributed to a moderation in private consumption growth.

Sustained economic growth is likely to continue to contribute to poverty reduction. Under the assumption that the responsiveness of the poverty rate to economic growth follows historical trends, the poverty rate, based on the lower middle-income poverty line of US$3.20/day, is projected to decline from 27.0 percent in 2015 to 22.9 percent and 21.7 percent in 2018 and 2019, respectively, as economic growth remains robust. These projections would imply a continuing trend of one million Filipinos being lifted out of poverty each year. Factors that have been driving poverty reduction in the Philippines include the movement of employment out of agriculture, a sustained inflow of remittances, and the government’s conditional cash-transfer program.

PROSPECTS AND RISKS

The country’s medium-term growth outlook remains positive. The Philippine economy is projected to continue on its expansionary path and grow at an annual rate of 6.7 percent in both 2018 and 2019. In 2020, growth is expected to level at 6.6 percent. The economy is currently growing at its potential, making productive investment in physical and human capital essential so that the economy can continue to grow along its current growth trajectory. Investment growth hinges on the government’s ability to effectively and timely implement its ambitious public investment program. Moreover, the government needs to clarify the role of the private sector in its investment program.

Domestic risks are becoming more prominent. Inflationary pressure is expected to intensify in 2018 due to both domestic and external factors. The Philippine economy is also at risk of overheating. The implementation of the public infrastructure program is vital to the country’s growth outlook, as private investment is expected to weaken. Prudent fiscal management and the implementation of the government’s tax reform agenda could help secure the country’s fiscal sustainability. External risks remain present, especially a faster-than-expected policy normalization in advanced economies that could trigger financial volatility and increase capital outflows from the Philippines. Renewed protectionist sentiments in several advanced economies will also elevate policy uncertainty, which may disrupt trade and investments.

Higher real wages are essential to achieve shared prosperity and inclusive growth. In recent years, the Philippine economy has made great strides in delivering inclusive growth, evidenced by the declining poverty rates and a falling Gini coefficient. Unemployment has reached historic low rates, but underemployment remains high, near its 18-20 percent decade-long average. More importantly, unlike its high-performing East Asian neighbors with booming manufacturing sectors that provide large numbers of labor-intensive jobs, a majority of Filipino workers that transition out of agriculture generally end up in low-end service jobs. Thus, while employment increased between 2006 and 2015, mean wages remained stagnant, with only a four percent increase in real terms over the same period. Low job quality and slow growth of real wages are the missing links to higher shared prosperity.

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Bridge under construction across the bay at Siargao, Philippines. The government’s Build Build Build program includes large projects that address transportation bottlenecks (photo: iStock/Alexpunker)

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The Philippines: A Good Time to Expand the Infrastructure Push

February 6, 2020

Infrastructure improvements will be crucial in the Philippines as the country looks to become an upper middle-income country and reduce poverty rates from 16.6 percent in 2018 to 14 percent by 2022.

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Structural economic reforms, along with sound macroeconomic policies, helped the Philippine economy to grow, on average, by 6.3 percent annually over the last decade. But sustaining and sharing the benefits of this growth among its citizens will require policymakers to focus their attention on issues such as costly geographical barriers to trade, high levels of poverty and income disparities, the rise of new digital technologies, and climate change

The Philippine economy ranks among the best performers in Asia in recent years. Still, the economy faces constraints from its outdated and insufficient infrastructure. According to some estimates , for example, it takes about five minutes to drive just one kilometer in Metro Manila.

To tackle the issue, the Philippines increased spending on roads, bridges, air and sea ports, and other large-scale projects in recent years. Public infrastructure investment rose from an average of 3 percent of GDP during 2011–16 to over 5 percent in 2018, with the target of raising the ratio to over 6 percent by 2022. The government’s Build Build Build program includes large projects that address major bottlenecks, focusing on transportation, water resources, and energy.

When completed, these projects are expected to bring important benefits to the Philippine economy and to the lives of ordinary citizens. Better transportation and internet services, for example, would help farmers bring their produce, such as bananas and mangos, to markets and raise the income of the rural population. More generally, improvements in the quality of infrastructure services will help cut the cost of doing business, attract more investment, and enhance productivity around the country.

Predicated on the infrastructure push and the ongoing economic policy reform efforts, private investment is projected to increase over time, leading to higher economic growth. Moreover, students and the sick and elderly will benefit from the investments in education and health care. Upgrades in public information technology infrastructure, such as e-invoicing and digital national identification cards, would also promote efficiency and transparency, helping to reduce corruption.

Increased investment to combat climate change and natural disasters will also bring substantial benefits. The Philippines is among the most vulnerable countries in the world to risks from climate change and natural hazards—typhoons, landslides, earthquakes, floods, droughts, and volcanic eruptions. The country’s vulnerability is exposed by the devastating impact of Typhoon Yolanda in 2013, which led to 6,300 deaths and, according to  official estimates , some US$3 billion in damage and losses to the economy (more than one percent of GDP). 

Climate-resilient infrastructure, efficient irrigation systems, and better water management will help lessen the impact of weather-related natural disasters and boost agricultural production, and potentially lift many people out of poverty.

Making better use of public resources

To succeed with the infrastructure push, the government will need to ensure its spending is well managed. A recent IMF Public Investment Management Assessment ranks the Philippines similarly to its regional peers, but observes an efficiency gap of about 23 percent compared with best practices in translating public investment into infrastructure. Closing this gap will require improving project appraisals, by identifying risk reduction measures early on and greater involvement of the public—for example, by publishing appraisal analyses for public comment. Moreover, more private-sector participation could help in executing the infrastructure investment push as long as financial risks to the government are well managed. Moreover, developing domestic capital markets could broaden the funding of the push.

Strengthening the public procurement process is another priority. Greater competition and transparency would help in managing costs and reducing risks of corruption. Imposing stricter sanctions, such as larger financial penalties and longer exclusion from future tendering, would help deter bid rigging in procurement. Likewise, allowing greater foreign participation in domestic projects would increase competition as well as help ease domestic capacity constraints.

Lowering obstacles to foreign investment would not only help the infrastructure push but also stimulate private investment. Despite recent progress, high barriers to foreign direct investment remain in the Philippines. Implementation of the ease-of-doing-business law would complement efforts to cut red tape as well as to increase transparency and accountability of regulatory agencies.

Finally, tax reform can help sustain the infrastructure push while safeguarding fiscal sustainability. The government’s recent tax reforms have led to a significant increase in revenue collection. But the remaining packages of reforms are important for further improvements in the tax system. Together with continued efforts to strengthen the tax system, these reforms will lay a foundation for inclusive growth by supporting sustainable investment in infrastructure and human capital.

Home — Essay Samples — Sociology — Globalization — The Impact of Globalization on the Philippine Economy

The Impact of Globalization on The Philippine Economy

• Categories: Globalization Philippines

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Published: Jan 5, 2023

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Essay on Economic Issues In The Philippines

Students are often asked to write an essay on Economic Issues In The Philippines in their schools and colleges. And if you’re also looking for the same, we have created 100-word, 250-word, and 500-word essays on the topic.

Let’s take a look…

100 Words Essay on Economic Issues In The Philippines

The Philippines suffers from high poverty rates. Many people lack basic needs like food, shelter, and clothing. This is because jobs are scarce and many are low paying. The government is trying to create more jobs and improve living conditions, but progress is slow.

Unemployment

Unemployment is another big issue. There aren’t enough jobs for everyone. This leads to people not having money to buy things they need. The government is working on this problem by trying to attract more businesses to the Philippines.

Education in the Philippines is not always good quality. Many schools lack resources like books and computers. This makes it hard for students to learn and succeed. The government knows this is a problem and is working to improve schools.

Infrastructure

The Philippines needs better infrastructure, like roads and buildings. Poor infrastructure can make it hard for businesses to operate and for people to get to work. The government is investing in infrastructure to try to fix this problem.

Corruption is a big problem in the Philippines. It makes it hard for the government to improve the economy because money is not always used correctly. The government is trying to stop corruption, but it is a difficult problem to solve.

250 Words Essay on Economic Issues In The Philippines

Introduction.

The Philippines, a Southeast Asian country, faces numerous economic problems. These issues include poverty, unemployment, and corruption. Let’s explore these issues in detail.

Poverty is a significant problem in the Philippines. Despite the country’s economic growth, many people still live in harsh conditions. They struggle to afford basic needs like food, shelter, and education. The government is trying to reduce poverty, but progress is slow.

Another big issue is unemployment. Many Filipinos do not have jobs, especially young people. This problem is due to a lack of job opportunities and skills mismatch. A lot of people have skills that do not match the jobs available.

Corruption is also a major issue in the Philippines. It affects the economy because money that should be used for public services ends up in the wrong hands. This problem hinders economic development and increases poverty.

To sum up, the Philippines faces several economic issues. These problems include poverty, unemployment, and corruption. Solving these issues is not easy, but with the right policies and actions, the country can improve its economy.

500 Words Essay on Economic Issues In The Philippines

The economy of the philippines.

The Philippines is a country in Southeast Asia made up of over 7,000 islands. Its economy is mixed, meaning it has both private businesses and government involvement. The country’s economy has seen growth in recent years, but it still faces many challenges.

Issue 1: Poverty

One of the main economic problems in the Philippines is poverty. Despite economic growth, a big part of the population still lives in poverty. This means many people don’t have enough money for basic needs like food, shelter, and education. Poverty is more common in rural areas where farming is the main source of income.

Issue 2: Unemployment

Unemployment is another big problem. This means there are people who want to work but can’t find jobs. The COVID-19 pandemic made this worse, as many businesses had to close. The government is trying to create more jobs, but it’s a slow process.

Issue 3: Inequality

Inequality is another issue. This means that the wealth in the country is not shared equally. A small group of people own a big part of the country’s wealth, while many others have very little. This makes it hard for people to improve their lives.

Issue 4: Natural Disasters

The Philippines is often hit by natural disasters like typhoons, earthquakes, and volcanic eruptions. These disasters damage homes, roads, and businesses, which hurts the economy. The government has to spend a lot of money to repair the damage and help people recover.

Issue 5: Dependence on Overseas Workers

A lot of Filipinos work in other countries and send money back home. This money is a big part of the country’s income. But it also means the country depends a lot on other countries’ economies. If these countries face economic problems, it can hurt the Philippines too.

Ways to Improve

To solve these problems, the government is working on several things. They are trying to help farmers by providing better tools and training. They are also trying to create more jobs, especially in manufacturing and services. They are investing in education to give people better skills for these jobs. And they are working on improving the country’s infrastructure to make it more resilient to natural disasters.

In conclusion, while the Philippines has made progress, it still faces many economic challenges. By focusing on reducing poverty, creating jobs, reducing inequality, and improving resilience to natural disasters, the country can continue to grow and improve the lives of its people.

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Continued support for responsible Mining to drive economic growth and empower local communities

Mining companies are calling on industry stakeholders to strengthen support for responsible mining, underlining the industry’s untapped potential to further drive economic growth and support social development at the national and local level, while fostering environmental stewardship.

Mining company representatives echoed the sentiment as the industry gathered to launch “Living with a Brighter Future,” a documentary developed as part of the industry’s Better Mining, Brighter Future communication and advocacy campaign. The campaign, which aims to raise awareness about responsible mining, is a joint initiative of the Chamber of Mines of the Philippines; the Philippine Nickel Industry Association; the Chamber of Mines – Caraga; the Alliance of Responsible MIners and Operators – Visayas; the Eastern Rizal Minders Association; the Mindanao Association of Responsible Quarry Operators Foundation, Inc.; and the Philippine Mining & Exploration Association.

Atty. Mike Toledo, Chairperson of the Chamber of Mines of the Philippines, gave the Welcome Remarks at the launch of the “Living with a Brighter Future” documentary. The documentary aims to raise awareness about the responsible mining practices of mining companies in the Philippines. The documentary is part of the Better Mining, Brighter Future campaign, a joint initiative of the Chamber of Mines of the Philippines; the Philippine Nickel Industry Association; the Chamber of Mines – Caraga; the Alliance of Responsible MIners and Operators – Visayas; the Eastern Rizal Miners Association; the Mindanao Association of Responsible Quarry Operators Foundation, Inc.; and the Philippine Mining & Exploration Association.

The “Living with a Brighter Future” documentary provides a comprehensive narrative of responsible mining practices, portraying the collaborative efforts between mining companies, local communities, and local government units. Through the eyes of company representatives and community members, the documentary showcased the positive socio-economic impact and environmental sustainability initiatives of the mining industry across Luzon, Visayas, and Mindanao. 

“Mining companies have made substantial contributions to local communities through its Social Development and Management Program or SDMP. Additionally, the industry’s environmental commitments have been significant,” said Atty. Mike Toledo, Chairperson of the Chamber of Mines of the Philippines. 

From 2002 and 2027, mining companies have pledged a total of PHP 31.81 billion towards SDMP initiatives, with PHP 20.3 billion earmarked for the period spanning 2002 to 2024. Since 2002, SDMPs have positively impacted over 1,160 barangays across the country.

Mr. Pocholo Domondom, Partner at PwC, gave the Keynote Presentation at the launch of the “Living with a Brighter Future” documentary. The documentary aims to raise awareness about the responsible mining practices of mining companies in the Philippines. The documentary is part of the Better Mining, Brighter Future campaign, a joint initiative of the Chamber of Mines of the Philippines; the Philippine Nickel Industry Association; the Chamber of Mines – Caraga; the Alliance of Responsible MIners and Operators – Visayas; the Eastern Rizal Miners Association; the Mindanao Association of Responsible Quarry Operators Foundation, Inc.; and the Philippine Mining & Exploration Association.

SDMPs serve as a collaborative platform where mining companies, the local government, and the community come together to bridge the gaps in both physical and social infrastructures within the communities they operate in. Through constant consultations with the host and neighboring communities, mining projects are able to meet the needs of residents and offer impactful solutions that yield both immediate and long-term benefits. During the event’s panel discussion, industry leaders highlighted initiatives such as employment creation, education and healthcare investments, infrastructure development, and the preservation of indigenous culture through programs like the IP Culture Revitalization Program.

On the other hand, the Philippine mining industry has provided PHP 387.81 billion, as of December 2023, to environmental protection and enhancement programs. In addition, the mining industry has committed PHP 6.72 billion for the rehabilitation of decommissioned mines. One concrete example of the initiatives of the industry is the number of trees planted where, as of December 2023, more than 50 million seedlings covering almost 45 hectares of land have been planted by the industry. Of these planted trees, approximately 90% have survived.

(From left to right: Jasmin Romero, Journalist; Atty. Joan Adaci-Cattiling, President of OceanaGold Philippines, Inc.; Joey Ayson, President, Philippine Mining & Exploration Association; Atty. Dante Bravo, President, Philippine Nickel Industry Association; and Engr. Francis Felizardo, President and CEO, Montepiedra Aggregates Corporation) Mining industry leaders served as panelists at the launch of the Living with a Brighter Future documentary. The leaders discussed the various Social Development and Management Programs, Environmental Protection and Enhancement Programs, as well as the economic contributions of the industry. The Living with a Brighter Future documentary, which aims to raise awareness about the responsible mining practices of mining companies in the Philippines, is part of the Better Mining, Brighter Future campaign, a joint initiative of the Chamber of Mines of the Philippines; the Philippine Nickel Industry Association; the Chamber of Mines – Caraga; the Alliance of Responsible MIners and Operators – Visayas; the Eastern Rizal Miners Association; the Mindanao Association of Responsible Quarry Operators Foundation, Inc.; and the Philippine Mining & Exploration Association.

“Through innovation and modern technologies, the mining sector is reducing its environmental footprint and paving the way for a future where economic development and environmental stewardship go hand in hand. Progressive rehabilitation efforts, coupled with investments in reforestation and environmental protection, demonstrate the industry’s commitment to responsible stewardship of natural resources,” Atty. Toledo added.

The documentary highlighted that the industry contributed PHP 170.1 billion (in current prices) to the Philippines’ GDP in 2022 alone and employed over 212,000 individuals as of 2023.

In his keynote presentation, PWC Partner, Mr. Pocholo Domondon further reiterated the industry’s economic contributions citing NEDA’s 2023 Philippine Development Report which stated that while there was an 18.5 percent decline in the total net FDI, significant contributions were still noted for manufacturing, transportation and storage, and mining and quarrying in terms of increased net equity FDI. In the same report, the government also listed the fiscal regime for mining as one of the tax measures that the government is discussing as part of efforts to achieve its fiscal targets until 2028. Further, the government has also cited the mining sector, along with the manufacturing sector, as essential sectors expected to support the government’s 4PH program. The 4PH program aims to build 1 million housing units yearly until 2028.

As the industry moves forward, their collective commitment underscores a shared vision for a sustainable future where responsible mining plays a pivotal role in driving economic growth, fostering social development, and preserving the environment for generations to come. 

This article is brought to you by the Chamber of Mines of the Philippines; the Philippine Nickel Industry Association; the Chamber of Mines – Caraga; the Alliance of Responsible Miners and Operators – Visayas; the Eastern Rizal Miners Association; the Mindanao Association of Responsible Quarry Operators Foundation, Inc.; and the Philippine Mining & Exploration Association.

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Degrowth vs prosperity in economic and energy policies

My Cup Of Liberty

By Bienvenido S. Oplas, Jr.

There has been some not so good news in the Philippines’ fiscal and energy sectors recently. See these stories in BusinessWorld : “Philippines aims to double solar, quadruple share of wind in power output by 2030” (April 30), “Zero tariff policy now extended to two-wheeled EVs, hybrid vehicles” (May 17), “Yellow alert raised over Luzon, Visayas” (May 20), “Biofuel decision seen requiring study due to impact on poor” (May 21).

The zero tariff policy on imported EVs is another double standard in taxation. Even if the government needs additional tax revenues to reduce the budget deficit — P272.6 billion in Q1 2024, slightly up from P270.9 billion in Q1 2023 — the government gives up collecting taxes from people who are not really poor since they can afford EV motorcycles and hybrid cars.

The expansion of solar power (often via the conversion of agricultural land to solar farms) and the expansion of biofuel to feed vehicles (often made using corn and sugarcane) imply less food production for humans and livestock, which contribute to higher food inflation.

One piece of good news recently seen in BusinessWorld is this: “DoE signs two more deals with US to enable nuclear transition” (May 21). As this column has continuously argued lately, we need more nuclear energy for power generation, plus nuclear applications in agriculture, healthcare, and other sectors.

The endless push to have more wind-solar power in the power grid and the scramble to decarbonize has already led to deindustrialization and degrowth in many countries in Europe. Clear examples are the UK and Italy — their total electricity generation has been declining for two decades (2005-2024) now, whereas high coal-using China and Vietnam, and also the Philippines, have been able to sustain growth of 4-11% over the past two decades ( see Table 1 ).

This week, the Independent Electricity Market Operator of the Philippines (IEMOP) held a media briefing and among the data they presented were the levels of power reserves, margins, and prices in the March to May billing. The price increases in April and May over March were substantial but smaller compared to the prices in April and May 2023. Mainly because the Margin (= Supply – [Demand + Reserve requirements]) in 2024 was significantly larger than the Margin in 2023 ( see Table 2 ).

CLIMATE CHANGE The Australia Bureau of Meteorology’s sea surface temperature (SST) index in El Niño region 3.4 showed that as of May 19, the index was 0.35° Celsius (C), meaning it was in the neutral phase (between 0.5° C to -0.5° C). So, the El Niño phase (an SST of 0.51° C or warmer) is over and we are transitioning to La Niña (an SST of -0.51° C or cooler).

The US National Oceanic and Atmospheric Administration’s climate prediction center shows that as of its May 20 projection, we will enter the La Niña phase around early July, or less than two months from now. Then we will prepare for more clouds and rain, and more floods in this part of the Pacific.

Again, climate change is natural or nature-made, a warming-cooling cycle that has existed for the past 4.6 billion years when planet Earth was born. The El Niño-La Niña cycle, the wet-dry cycle in the tropics, the winter-spring-summer-fall cycle in the North and South Hemispheres, the water evaporation-condensation cycle, etc., are all natural. All the policies and public spending, and subsidies to “fight man-made climate change” amount to nothing and should be stopped.

We should focus on more economic growth, more prosperity to save the poor and hungry, not save the planet which does not need any savior in the first place as it just goes through endless warming-cooling cycle for decades and even centuries.

Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers. He is an international fellow of the Tholos Foundation.

[email protected]

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Cordillera records sustained economic growth in 2023

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Currently viewed by: Marcus Rosit

• by Carlito Dar
• May. 23, 2024 10:04 am in News

BAGUIO CITY (PIA) - - The Cordillera Administrative Region records a sustained economic growth in 2023 with a Gross Regional Domestic Product (GRDP) of P361.1 billion, a growth of 6.9 percent compared to the P337.7 billion GRDP in 2022.

The region's 6.9 percent growth is higher than the national level of 5.5.  It  is the  fourth fastest among the regions of the country, behind Region VII (7.3%), Region VI (7.2%) and Region 1 (7.1%).

The  GRDP  per capita  of Cordillera of P195,162 is also the second highest next to the National Capital Region. 

GRDP per capita  is defined as ratio of GRDP to the total population of the region.

Of the P361.1 billion Cordillera GRDP, Services is the biggest contributor with 245.9 billion (68.1%) followed by Industry at P87.4 billion (24.2%),  and  Agriculture, Forestry and Fishery with P7.7 billion.

Since 2022, the Cordillera economy surpassed its pre – pandemic level or the 2019 GRDP of P322.1 billion, and it continues to grow.

The Philippine Statistics Authority-Cordillera  headed by Regional Director Villafe Alibuyog presented the 2023 Report on the  Economic Performance  in a recent  news conference. 

National Economic Development Authority-CAR OIC Assistant  Regional Director Jose Dado reported that the region’s 6.9 percent economic growth surpassed the 5. 6 percent 2023 target under the Regional Development Plan 2023 – 2028.

He cited the industry sector which includes tourism as a major contributor to the region’s sustained economic growth.From the over 1.28 million recorded tourists in 2022, it increased to around 1.68 million in 2023.

“The tourism and hospitality industries  have consistently catered to the influx of regional visitors seeking lodging, dining options and efficient transportation services, thereby establishing it as a key driver of economic growth in the region,” he said.

For ways forward, Dado called for a whole – of – government and whole – of society approach in moving the Cordillera economy towards sustainable and inclusive growth.   “May our economic performance in 2023 serve as a source of encouragement as we continue our collaborative efforts towards progress and prosperity. As our economy keeps growing, our goal is to ensure that development policies not only result in improved economic growth but also lead to better, more prosperous and resilience life for all our people, leaving no one behind,” Dado stressed. (JDP/CCD-PIA CAR)

About the Author

Carlito Dar

Information Officer II at PIA Cordillera

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